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March 9, 2011

8

Is LIBA going to urge city to drop federal arena assistance?

by Deena Winter

I’m hearing LIBA (the Lincoln Independent Business Association) is concerned about the strings attached to the federally subsidized bonds the city is using to help finance part of the arena project. According to my source, since the city is using federal Build America Bonds, contractors will have to pay “prevailing local wages” on the job, which this person says will add millions to the cost of the project — perhaps more than the city will save by getting the low-interest financing.

For example, a sheet metal worker would have to be paid at least $26.17 an hour plus $12.52 in benefits, according to the federal Davis-Bacon requirements for this area.

I was told LIBA might bring this up at the JPA meeting on Thursday, but they didn’t.

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8 Comments Post a comment
  1. CAS
    Mar 9 2011

    Oh no! We wouldn’t want to pay a local prevailing wage.

    Reply
  2. L
    Mar 9 2011

    Just another minor detail that comes out after the supporters won voter support for this project. I wonder how many other undisclosed pieces of information will see the light of day as this project moves forward?

    Reply
  3. Jeffrey Poley
    Mar 9 2011

    Deena:

    I’m wondering what’s so onerous about paying prevailing wages to workers in Lincoln. The sheet metal worker used in the example would be making slightly less than $55,000/year, not the kind of income that would make him or her rich. I suppose the LIBA folks would rather have the taxpayers of Lincoln give our money to their friends in the bond business in Chicago or New York rather than pay it to our neighbors so that they can feed and educate their families. If we’re running short of money, maybe we should limit the incomes of any attorneys working on this project to $55,000/year.

    Jeff…

    Reply
  4. Jane H Kinsey
    Mar 9 2011

    What a bunch of leaders we have. Doesn’t anyone look into specifics before they jump into something?
    I will be there to complain tomorrow as a member of Watchdogs of Lincoln Government.

    Reply
  5. in the real
    Mar 9 2011

    I don,t think there is anything wrong with People making good and honest wage.The problem I have with it is the way it has all played out. Not with this one project alone but many of them in the last several years. I also think LIBA is talking out both sides of there mouth There usually are pushing for growth so there you have it.Get the money from the 2015 group that’s who wanted it built. This arena will never be in the black unless you use smoke and mirrors the a lot of spin.

    Reply
    • ej
      Mar 10 2011

      Sorry, in the real, but a whole lot more people than the 2015 group want the area built. I assume you saw the results of the vote. ‘Nuff said.

      Reply
  6. in the real
    Mar 9 2011

    The City could save a lot more then that if they disciplined the men who Cruise UNL campus in that purple or maroon colored truck. My husband said he thinks its a concrete truck. I followed them one day and they went to DQ on west “O” street. I fill sure that they could take a brake closer to there work then that

    Reply
  7. just the facts
    Mar 10 2011

    According to the terms of any project that is deemed to be considered a project subject to the payment of wages in accordance with the Davis Bacon Wage Act, salaries must be paid at what the Federal Law calls a “prevailing wage” which is by definition a term synonymous with union scale wages and may or may not be representative of the “average” or the “median/most frequently” paid wage in a community for the same job.

    So regardless if the employer is a merit shop employer or a union shop employer the employing firm is REQUIRED by FEDERAL LAW to pay wages and benefits that have been PREDETERMINED irrespective of the organization’s ability to pay and are most likely higher than they would normally be able to afford to pay or that they would pay for any competitively bid, privately funded project. It can in many cases be higher than what they included in their initial bid estimates if the project wasn’t deemed to be subject to the Davis Bacon Wage Act when it was initially proposed (as is the case with the Arena project).

    Based on the example stated in this story of a sheet metal worker, the Davis-Bacon required wage for that job description is mandated at $26.17 per hour in wages, plus $12.52 per hour in fringe benefits. This equates to a gross hourly wage of $38.69 per hour and an annual gross compensation (wage and fringe) of $78,927.60 (at 2,040 hours of work in a year and exclusive of overtime – which is time and a half). You can check out these wage requirements for yourself at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=Davis-Bacon&docid=NE20100005

    In comparison, according to the US Department of Labor, the national median wage (the most commonly paid, not the average) for a sheet metal worker in 2009 was “$19.54 hourly, with $40,640 annually”. (see: http://www.onetonline.org/link/summary/47-2211.00).

    The median wage (most commonly paid – not the average) in Nebraska was actually a little higher at “$19.74 hourly with $41,100 annually”. The 90% percentile (the top 10% of the sheet metal workforce) for this work in Nebraska was “$31.97 hourly and $66,500”. (Source: http://www.careerinfonet.org/occ_rep.asp?optstatus=011000000&soccode=472211&id=1&nodeid=2&stfips=31&search=Go).

    The issue isn’t so much with the wage itself as it is with the MANDATING of the wage at a premium rate which in this case is CLEARLY NOT a prevailing “LOCAL” wage as evidenced by the above, AND the MANDATING of the excessive hourly fringe rate. To see a national average comparison of the benefits paid to private industry workers and those paid to state and local government workers – check out: http://www.bls.gov/news.release/ecec.nr0.htm

    Reply

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